KUALA LUMPUR: The Employees Provident Fund (EPF) recorded a gross investment income of RM19.29 billion for the first quarter (Q1) ended March 31, despite uncertainties from Covid-19.
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The retirement fund said equities registered RM14.28 billion in income during the quarter, accounting for 74% of total gross investment income, while fixed income instruments continued to contribute a stable income of RM3.92 billion.
Income from real estate and infrastructure, as well as money market instruments, contributed RM0.71 billion and RM0.38 billion, respectively.
It said after the cost write-down on listed equities, which was a prudent measure practised by EPF to ensure that its long-term investment portfolio remains healthy, the fund recorded a net investment income of RM19.24 billion.
Chief executive officer Amir Hamzah Azizan said the solid performance for Q1 was a spillover from the global economic recovery that began in the second half of last year.
“We believe that the vaccination rollouts, as well as supportive fiscal and monetary policies worldwide will play a key role in facilitating economic activities and growth,” he said in a statement today.
Amir said inflationary concerns did not derail the positive trend in the equity market, and the EPF took advantage of the opportunity to reposition holdings in stocks that were fundamentally strong but undervalued.
EPF’s investment assets stood at RM981.71 billion as at end-March 2021, of which 36% was invested overseas and diversification in different asset classes, markets, as well as currencies, continues to provide income stability and added value to the fund’s overall returns.
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During Q1, EPF’s overseas investments generated an income of RM11.15 billion, or 58%, of the total gross investment income recorded, mainly driven by foreign equities.
By asset class, fixed income instruments made up 46% of investments, while equities comprised 44%.
Money market instruments and real estate and infrastructure made up 4% and 6%, respectively, of investments.
The portfolio reflects EPF’s diversification strategy to optimise returns within tolerable risk limits as guided by its strategic asset allocation (SAA) policy.
Amir said a disciplined investment approach and robust liquidity management guided by SAA have been successful in minimising the impact of the substantial disbursements on EPF’s portfolio, allowing it to sustain a steady performance.
“This reflects the fund’s commitment to safeguarding our members’ retirement savings by preserving and enhancing the value of those savings, while ensuring that their short-term needs are met without compromising their long-term interests,” he said.
To date, a total of RM57.97 billion of i-Sinar withdrawals have been approved for 6.49 million applicants, out of which RM50.93 billion have been disbursed, while RM20.80 billion has been paid out to 5.27 million members under the i-Lestari facility.
The EPF’s i-Sinar and i-Lestari facilities were introduced to allow affected members to make withdrawals that would help provide some measure of financial relief. – FMT